Climbing the Ladder to Success

Program Management is inherently nebulous. For those who have been through a new product development project, there is an understanding of the many activities that must be managed to successfully launch a product. It is one thing to identify all the tasks that must take place before launching a new product, it’s another to manage all of those tasks and ensure they’ are completed correctly, on time and within budget. Companies that launch new products come in many different shapes and sizes, but some basic concepts hold true regardless of the size of an organization.

The role of Program Management varies from company to company, as does the scope of the overall PM process. The goal of this process should be to manage the inputs and outputs of developing a product or service. To achieve success, systems must be set up to work together to allow interconnected processes.

The key to an effective PM system is the integration of practices into one cohesive system that allows these functional areas to work together. By breaking down the processes that support Program Management into manageable pieces, improvements can be made one step at a time — building a ladder to success.

The following best practices can be regarded as rungs on this ladder. At the top of the ladder is a successful product launch. Although it’s possible to reach the top with certain rungs missing, the goal is to utilize best practices to make the journey easier — to guarantee all of the rungs are in place to assure an effortless climb.

Survey Says

Recently Plante & Moran, in cooperation with the Original Equipment Suppliers Association (OESA), distributed a Program Management Survey. The purpose of this survey was to collect project management data from manufacturing companies and relate the maturity of program management processes to program success. The goal was to understand the practices which lead to “successful” product launches. For this survey, “successful” programs were defined as those which were on time, within budget, and resulting in a satisfied customer. This data has provided Plante & Moran with invaluable insight into the practices that form the rungs that lead to a successful product launch.

Program Planning

One of the first, and most important, set of steps on this ladder is program planning. A good planning process is instrumental in positioning an organization for success. Program planning includes defining detailed work elements, identifying resources to complete work, scheduling the tasks, establishing budgets, and attaining approval.

Some other key activities to conduct during the planning process are apparent from the survey results. They involve breaking down the tasks and assigning resources to these activities. Of the participants that completed the survey, companies who consistently break work down to a task level and assign resources to those tasks had a higher level of launch success. In fact, those that consistently followed this practice on all programs had a program success rate of 92 percent, whereas those companies who don’t consistently follow this practice averaged a 77 percent success rate.

The larger the companies, the more dramatic this difference becomes. For smaller companies, (with total revenue of less than $100 million), there is more tolerance for not planning down to the task level.

For example, these companies achieved an average project success rate of 93 percent when activities are planned to the task level, versus 74 percent when inconsistently practiced. Companies with total revenue between $100 million and $500 million showed a greater need for planning. They achieved an average success rate of 90 percent when planning down to the task level, versus 52 percent when inconsistently practiced. These results illustrate the need to address the planning process while a company is growing. That said, only 22 percent of all companies surveyed are consistently creating schedules in this manner, which means 78 percent are currently struggling to hurdle that missing rung.

Assigning Resources

The next major point in the planning stage has to do with assigning resources to the tasks identified. The survey results indicate that when resources are always defined for each task, there is a higher success rate for program launches.

Specifying an individual, instead of a responsible department, will influence the success rate. Often times when a department is assigned a task, as opposed to an individual person, it’s more difficult to hold people accountable for completing the task in a timely manner.

Companies ranging from $100 million to $500 million who always defined the resources for each task showed reflected an average success rate of 85 percent. For those who did not, the success rate dropped to 60 percent.

Although smaller companies can manage programs with less structure, there was a similar, but less dramatic, slope for those companies under $100 million. Overall, the consistent practice of identifying resources yields a greater return of success. The data supports the need for companies to adapt their program management efforts to revenue growth. In some cases, smaller companies managed good levels of achievement without performing detailed planning efforts. This planning need becomes more apparent as companies grow.

As job responsibilities become more specialized in medium- and larger- sized organizations, additional detailed planning becomes critical to maintain higher levels of success. It is imperative that organizations modify their processes to maintain and sustain continued growth. As companies grow, the challenge is to provide standardized processes that are in place to maintain and sustain continued growth. The challenge is being proactive in setting up these processes to ensure they are in place as growth is achieved. Often times, companies wait to adjust or improve their systems until after they “feel the pain” of poor product launches.

Data Management

Another example of an opportunity for improvement that appears in the survey data is related to how companies manage documents and data throughout the Program Management process.

Design and process development stages include numerous activities that must take place in a predefined sequence in order to be effective. In a manual system, the data and documents from these activities tend to reside with the document creator and are distributed when requested. This means that a substantial effort may be required to access information in such a system.

As organizations become larger and more complex, it becomes more difficult and costly to obtain necessary information. An electronic central repository that is accessible to all team members can resolve many of these issues if set up properly, but less then 15 percent of organizations surveyed had any type of robust system to support their Program Management outputs.

As opposed to a rung on the ladder, this type of system ends up being an integral part of the ladder structure, holding all of the other processes together.

Step by Step

Only 37 percent of the companies who participated in the survey stated that all of their previous years’ launches were successful. This means that there are a lot of organizations out there struggling to pull themselves up over missing rungs. And this success rate will only get worse with the inevitable changes that occur in manufacturing.

Whether these changes stem from growth and shifting customer expectations or are the result of companies experiencing changes due to growth, along with changing customer expectations, good Program Management practices are becoming critical in achieving higher levels of success with each new change.

In order to improve business processes, it is important to ascertain how things are being done today, the expectations of the customer, what is currently standardized and how well products are launched.

By evaluating a company’s current Program Management processes to determine where best practices can aid in meeting these defined customer expectations, steps can be put into place to improve the process and assure the organization an effortless climb. All of this can lead to a perfect Program Management ladder for your organizations needs, both now and well into the future.